The beginning inventory balances of 20X5 are given below for MCR Company: Raw Materials... Work in...
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The beginning inventory balances of 20X5 are given below for MCR Company: Raw Materials... Work in Process.. $76,000 23,000 Finished Goods.. 49,000 The following information and transactions are related to the operations of MCR Company for 20X5: Purchases of raw materials amounted to $233,000 Issuances of raw materials amounted $241,000 for direct materials and $1,300 for indirect materials. a. b. C. d. Payroll for the year amounted to $161,000 for direct labor and $45,000 for indirect labor. Manufacturing overhead is applied to production at 80% of direct labor cost. Other manufacturing overhead for the year amounted to $104,300. Credit Sundry Credits. Goods costing $516,000 were completed for the year. Sales on account for the year were $842,000. The cost of these sales amounted to $498,000. c. f. g. Required: 1. Prepare journal entries to record the information given above. 2. Compute the under- or overallocated manufacturing overhead of MCR Company in 20X5. Dispose of this amount using: a. Write-off to Cost of Goods Sold. b. Proration based on ending balances (before proration) in Work-in-Process Control, Finished Goods Control, and Cost of Goods Sold. c. Which method do you prefer in requirement a, and b? Explain. The beginning inventory balances of 20X5 are given below for MCR Company: Raw Materials... Work in Process.. $76,000 23,000 Finished Goods.. 49,000 The following information and transactions are related to the operations of MCR Company for 20X5: Purchases of raw materials amounted to $233,000 Issuances of raw materials amounted $241,000 for direct materials and $1,300 for indirect materials. a. b. C. d. Payroll for the year amounted to $161,000 for direct labor and $45,000 for indirect labor. Manufacturing overhead is applied to production at 80% of direct labor cost. Other manufacturing overhead for the year amounted to $104,300. Credit Sundry Credits. Goods costing $516,000 were completed for the year. Sales on account for the year were $842,000. The cost of these sales amounted to $498,000. c. f. g. Required: 1. Prepare journal entries to record the information given above. 2. Compute the under- or overallocated manufacturing overhead of MCR Company in 20X5. Dispose of this amount using: a. Write-off to Cost of Goods Sold. b. Proration based on ending balances (before proration) in Work-in-Process Control, Finished Goods Control, and Cost of Goods Sold. c. Which method do you prefer in requirement a, and b? Explain.
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Related Book For
Managerial Accounting
ISBN: 978-0697789938
13th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
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